The professional and trade segment continued to drive growth at John Wiley & Sons in the second quarter ended October 31. Revenue in the segment jumped 56%, to $89.7 million, due to a combination of last September's purchase of Hungry Minds and a 9% increase in organic growth. Total revenue for the company rose 26.6%, to $223 million, and net income was $34.7 million (including a one-time tax benefit of $12 million), compared to $17.9 million in last year's second quarter.
Organic growth in the professional/trade division was due to factors as solid gains in cooking, reference and travel. Wiley's business book line is also doing well, with sales up 11% in the quarter in a soft market, while consumer sales in its technology line "are on track to finish ahead of last year," said Wiley president Will Pesce. While sales of professional technology titles continued to be weak, sales of consumer titles in such areas as digital photography, general PC technology and home networking have done well.
In the scientific, technical, medical segment, revenue rose 1.4%, to $42.4 million, driven by growth in its journals operations. Book sales were sluggish, and Pesce said he has some "mild concern" about the effects of tighter library budgets on future book sales. Backlist titles have been hit the hardest by soft library funding, Pesce added.
In its higher education segment, sales increased 4.9%, to $36.6 million, and Pesce said he expects sales in the division to be up in mid-single digits for the full year. While most categories posted increases in the quarter, sales of engineering texts were below expectations.
Sales in Wiley's European segment increased 34%, to $55.1 million, led by solid gains in journals plus higher book sales in the professional/trade category, where increased sales in the U.K. offset softness in Germany. In Asia, revenue increased 37%, to $21.9 million. Journal growth was strong across the board, and book sales were up in all locations but Japan and Australia. Pesce was particularly pleased with business in China, where subscription and rights revenue were up. The company also concluded an agreement with the Chinese publisher CMP to publish translations of Wiley's For Dummies series.
In another deal involving the Dummies brand, Wiley signed an agreement with Mindleaders, an e-learning content provider and distributor, to make the Dummies series available to the online learning market. At least eight technology-focused For Dummies titles will be available as online courses by the end of December. The deal will make branded For Dummies e-courses available through the Mindleaders and the Wiley Web sites. Pesce told analysts in a conference call that while the Mindleaders deal will not likely generate significant revenue, it is a good example of how well the Dummies brand travels.
Pesce also told analysts that Wiley will continue to pursue acquisitions in its three core areas as long as the purchase makes strategic sense and the company can be bought for a reasonable price. Wiley had been interested in acquiring Houghton Mifflin's college segment as well as Kluwer Academic Publishers.
For the first half of fiscal 2003, revenue was up 27.3%, to $429.4 million, and net income increased 46.5%, to $54.8 million.
